On the right track

By Melanie Delargy 1999-07-09T00:00:00+01:00

How Bovis is using bar coding technology from the retail sector to manage the supply chain on an Egan demonstration project.

“Egan asked us to go out and learn from outside the construction sector,” says Bovis’ Nigel Grace. “And that’s exactly what we are trying to do.” Grace is a commercial manager responsible for building Safeway supermarkets. He has joined forces with Laurence Marsh, continuous improvement manager at Bovis, to investigate the potential of bar codes and electronic data interchange in construction by using it on an Egan demonstration project.

EDI has revolutionised supply-chain management in the supermarket sector and the Bovis team wanted to apply the lessons learned to the construction process. But what can a construction site learn from the major retailers? “Safeway uses EDI all the way through the supply chain and has seen big benefits,” says Marsh. “It reduces stockholding and wastage and everything is done by bar coding.” He adds that such measures have enabled supermarkets to reduce costs by about 30%.

Some construction suppliers already use bar coding in the production process, “but the chain breaks down when it leaves the factory”, says Marsh. He and Grace wanted to find out what would happen if, as with supermarkets, supplies could be tracked from factory to site.

They decided to start small. Bovis has a contract to build a Safeway store in Stratford, east London. Marsh and Grace thought the brickwork package would make a good trial for the demonstration project.

They approached brickwork contractor Lesterose and brickwork supplier Ibstock, and both were happy to take up the challenge. All along, the pair held open meetings for everyone involved with the project – subcontractors, suppliers and Safeway representatives.

At one of the first meetings, the stonework supplier, NBS Pennine, put its head above the parapet and said, “We have bar codes – can we be part of the scheme?” Marsh and Grace were delighted, and NBS Pennine joined the project.

The Stratford store started on site on 1 June and is due for completion by Christmas. The demonstration project is grandly called Safeway Stratford: Developing a Retail Model of Logistics for Construction, and Marsh has dubbed the actual process of tracking supplies Smart Trak.

So, how does it work? Bovis has supplied the subcontractor and the brick supplier with a computer scanner, ISDN lines and other equipment to create the data interchange links. Both firms already had their own computer systems and modem.

At the factory, pallets of bricks are shrinkwrapped with a bar code on the plastic wrapping. The delivery note also incorporates a bar code. Bricks ordered leave the factory and arrive on site where one of two delegated Lesterose workers will be waiting.

The operative checking in the bricks uses a handheld computer to swipe the bar code on the bricks and on the delivery note. If there is a problem, such as damaged bricks, this can be keyed into the computer.

Once the computer is back in its cradle, it transmits a message to central accounts confirming the number of bricks delivered, the time and date. If there is a pallet of damaged bricks, the computer sends a message to the supplier alerting it to send another pallet immediately.

The tracking process is secure because the operative assigned to the delivery has to use a button-sized electronic tag to access the computer. He or she then keys in a pin number that launches the system and records the time and date on the handheld computer.

The first delivery of bricks is due any day, and Marsh and Grace will be there to oversee the process.

As a project manager, Grace is very taken with the ease of re-ordering. “The traffic is heavy around the Stratford part of London and it can take a long time for a brick lorry to go back to the supplier with a certificate stating the problem and return with another lot of bricks,” he says.

“And,” says Marsh,” there are no lost delivery notes because the note goes straight into the computer.” “It’s a well known fact that subbies and contractors use lost delivery notes [as an excuse] for not paying,” adds Grace.

Both point out that there is often a problem with over-ordering on brickwork packages. Bricks are fired seasonally and to avoid a famine of the particular type used in a project, subcontractors overestimate the amount needed to be on the safe side. The unused bricks then have to be disposed of, which costs money.

The scanner helps the subcontractor build up an accurate picture of how many bricks have arrived on site compared with how many are used.

The demonstration project is a start, but Marsh and Grace’s ultimate aim is to see the construction supply chain revolutionised by electronic processes in the same way as the retail sector. And they want to match the 30% savings achieved by the supermarket chains.

Marsh lists the many benefits as faster payment to suppliers, reduced waste on site and increased predictability of deliveries – all Egan-style targets. But he and Grace admit that the industry has some way to go.

And there is a problem. The supermarkets put aside competitive differences and teamed up to decide how best to proceed, using EDI in the supply chain. They laid down standards so that the retailers and their suppliers all used the same processes. The system would not work if one supplier had one way of representing the delivery notes and another used a different format.

Construction Industry Trading Electronically is currently developing standard formats for the construction sector. As Marsh points out, these will need to cover both bar coding and the EDI systems, and file formats, invoices and delivery notes will all have to be standardised.

Grace concludes: “If you want to change the way the industry works, Bovis or Safeway can’t do it alone. We need to talk to competitors and rivals in the same way that the retail sector worked together.”

Monitoring suppliers

four problems … 1] Information received on site may not be reliable 2] Goods received notes go missing 3] Duplicating information wastes time 4] Delayed payments … and how EDI can solve them 1] Electronic data capture reduces potential for human error 2] Delivery note information stored electronically at the point of delivery 3]Information captured once at delivery and transferred electronically 4] Automatic information processing allows faster problem-solving